Ep. 361 - Kelonia, Kailera, pyschedelics and T cell engagers

The past week has delivered the largest M&A deal ever for a private, venture-backed biopharma, the second-largest follow-on ever for a NASDAQ-traded biotech and what could soon become the largest biotech IPO ever on NASDAQ. On the latest BioCentury This Week, BioCentury’s analysts discuss Eli Lilly's $3.25 billion takeout of in vivo CAR T company Kelonia, the market debut by obesity play Kailera and an upsized follow-on by Revolution on the back of its pancreatic cancer data.
The analysts also discuss how autoimmune T cell engagers are diverging from their oncology roots and the potential implications of President Donald Trump’s executive order on psychedelic therapies. BioCentury’s analysts also take time to remember Sofinnova Partners’ Denis Lucquin, father of French biotech. This episode of the BioCentury This Week podcast was brought to you by IQVIA Biotech.

View full story: https://www.biocentury.com/article/659183

#BiotechMA #BiotechIPO #CART #TCellEngagers #PsychedelicMedicine

00:01 - Sponsor Message: IQVIA Biotech
04:20 - Lilly's Kelonia Buy
10:31 - T Cell Engagers
23:07 - Psychedelics Executive Order
35:14 - CBER Director Search
37:37 - Public Markets Roundup
42:14 - Remembering Denis Lucquin

To submit a question to BioCentury’s editors, email the BioCentury This Week team at podcasts@biocentury.com.

Transcript

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[AI-generated transcript.]

Voice Talent: 0:02

BioCentury This Week is brought to you by IQVIA Biotech. A full-service CRO right sized for biotech. Dedicated to helping biotech leaders close unproductive gaps in clinical development so they can protect timelines, preserve capital and stay ahead of risk.

Jeff Cranmer: 0:22

Welcome to the latest edition of the BioCentury This Week podcast. Lilly is continuing to be active in the dealmaking space, announcing its fifth major deal of the year, a$3.25 billion upfront payment for an in vivo CAR T company named Kelonia, we'll take a look at why Lilly is buying this company, and how it's differentiated from another deal it recently did. And speaking of deals last month gave T-cell engagers new credibility as a potential modality for B cell depletion in autoimmune diseases. And from Washington, an executive order seeks to smooth the glide path toward approvals for psychedelic therapies. Meanwhile, in finance, Kailera and obesity play with China roots upsized. Its IPO late last week, which vaulted it to rare air, potentially one of the biggest ever biotech IPOs. And we'll, remember Denis Lucquin, the father of French biotech. I'm Jeff Cranmer, host of the BioCentury This week podcast, and joining me to discuss all of this, our editor in Chief, Simone Fishburn, Executive Editor Selina Koch, Washington Editor Steve Usdin, and the illustrious Lauren Martz, Executive Director of Biopharma Intelligence. But first, right around the corner Simone and Steve and a few of our other colleagues will be flying off to Prague to enjoy a beautiful city and the premier biotech CEO and Investor conference, which is now in its 26th year. Speaking of Denis uh Denis and his partner Antoine at Sofinnova, helped BioCentury by being the inaugural sponsor of this event. They always championed this event and well uh it's one of the reasons why Bio€quity is what it is today. Simone, are you getting excited? You uh got your uh scene setter stuff already baked?

Simone Fishburn: 2:49

Am I ever excited. First of all, I want you to know that I'm, I'm now deeply immersed in reading loads of books set in Prague. You know, Milan Kundera comes to uh

Jeff Cranmer: 3:00

yeah

Simone Fishburn: 3:00

to the fore. Yeah. Having a good time with that. But uh

Jeff Cranmer: 3:03

What's your favorite Milan Kundera?

Simone Fishburn: 3:05

What is my favorite?

Jeff Cranmer: 3:07

Yeah.

Simone Fishburn: 3:08

Ask me in a couple of weeks when I've read a few more

Jeff Cranmer: 3:10

All right.

Simone Fishburn: 3:11

right now I'm on Lightness of Being.

Jeff Cranmer: 3:12

Keep it unbearably light, Simone.

Simone Fishburn: 3:14

yeah Um anyway, yes, the, I'm also extremely excited about the scene set analysis that I'm doing, which I will talk a little bit more about when I've just done a little bit more work on it. But broadly, we are looking at clinical trials in particular Phase I, globally and within Europe. Where they're being done and who's doing them and in what disease areas and where the different hotspots and strengths are. So it's really, you know, shaping up to be very interesting. And as I said, we'll talk more about that.

Jeff Cranmer: 3:46

The need for speed. It's gonna be a great event. We have a great lineup of a hundred presenting companies from across Europe. a few slots left. So if you're interested, reach out to me or my colleague, Tim Tulloch, and if you're interested in attending jump right in, there are pre-event excursion still available and there will be lots of networking, networking, networking, networking. If you're looking to get in front of investors in Europe, this is the conference to do it. Alright, Eli Lilly deal number five. It, it seems like it's a race between Eli, Lilly and Gilead this year to see who can have the most. Big time deals. Lauren has been following most of them for us, along with our colleague Paul Bonanos. In this deal, well, it's once again putting its obesity earnings to work, building out its pipeline. Not quite as big as the Centessa deal that we recently talked about, that was 6.3 billion. This again, as I said, is, is 3.25 billion uh potential to get up to 7 billion, that's the bio buck number. Um, Lauren, what set this company apart from the others and then inspired Lilly to pull the trigger?

Lauren Martz: 5:06

So if I, if I had to guess, I think it would probably be the fact that Kelonia has some of the longest durability data for any in vivo Car Ts that we've seen so far. And we haven't seen a lot of clinical data and it's not a lot of durability data. But at ASH at the end of last year, we saw data from four patients. I think one of them had about five months of follow up. And efficacy still looks strong at that point. And so, that's kind of the most that we're getting right now. And I think when it comes to what people wanna see for these in vivo CAR T platforms durability is kind of everything, safety and durability. But Um that's kind of the, the yet unknown out there right now, especially when you're talking about applying these to cancer. so you mentioned that this was Lilly's second deal, I think for an in vivo CAR T company this year, just about two months after they announced the acquisition of Orna. What's different here is that that was an RNA based technology to create in vivo CAR T. This is a lentivirus based technology. I think we're still also waiting to see how these two different, and, and there are others, how these different mechanisms for creating these in vivo CAR T cell therapies really plays out in the clinic. I think there's some speculation that maybe the lentivirus will be more durable and something that can be applied to cancer. Maybe the mRNA will be something that you know, is faster acting and uh can be applied to autoimmune diseases. I don't think we know that yet, but this does give Lilly two different shots uh at the in vivo CAR T mechanism.

Simone Fishburn: 6:45

Lauren, this space is obviously just getting hotter and hotter. I know the. been a few sort of setbacks on the way here and there, patient death and also some, you know, what you've pointed to in durability. I'm just sort of wondering, we've seen a few deals in this is this becoming something that pharmas need to have in their stable, they need to have an in vivo CAR T, or is it not reached that kind of point yet?

Lauren Martz: 7:09

I think it's reaching that point. I think the data speak for themselves. We've seen quite a few acquisitions and, and just broad partnership deals around these, these technologies. It's still early, there's still limited clinical data, and I think this is the time when people wanna get in and not have to invest a ton. Although the steel, obviously is a big investment. But if this technology works as people are hoping it will work, then yes, these pharmas wanna be in, in here. CAR T cell therapies, ex vivo Car Ts are incredibly effective. And, and that limiting factor is the delivery and the manufacturing and all of that. This takes away so much of that complexity. if this is as effective and as an ex vivo CAR T. It's something that could be more effective than a T-cell engager, for example. You know, it, it just, it if the efficacy and the durability and the safety, which there could be safety advantages here over the ex vivo too. If they play out, then this could be a huge game changer in cancer, but also in autoimmune diseases as well. So it's still early, but I think it's the time that companies wanna get in.

Selina Koch: 8:14

Lauren. Um, on the durability front and people do say this durability is sort of everything, right? But if these are off the shelf and if they're say, a bit safer. Couldn't you just redose? Is it so absolute as durability has to be as long?

Lauren Martz: 8:30

That's a really good question. I think that certainly with an mRNA based approach, you have the opportunity to re-dose and that's something that the companies are looking into. I think it's kind of an open-ended question when you come to the viral vector based strategies because there's always the risk for an immune response. You know, like we've seen with AAV gene therapies. re-dosing is, is a challenge. So I'm not exactly sure how that will play out in the future.

Simone Fishburn: 8:56

I have another question, Lauren. most of what we've seen so far is in the same cancers as Car Ts, so multiple myeloma, the other blood cancers. Just wondering if you think that this will have more chance of expanding into other indications and, you know, what the timeframe might be. Have, have people talked about that?

Lauren Martz: 9:17

I haven't heard too much about that. I think there's so much technology risk here that going after CD19 And BCMA and uh maybe CD20, that's the obvious place to go. Um, the, so we mentioned the differentiation on manufacturing. There's potentially a safety advantage here too, because you take out the, you know, the lymphodepletion aspect, which adds a huge amount of toxicity to the ex vivo CAR T cell process, so. I don't know how that can help translate to other tumor types, like the solid tumor challenges are the solid tumor challenges, it's an antigen problem and I don't know exactly how, how an in vivo CAR T cell therapy could address that, but uh, I'm sure people are thinking about it.

Jeff Cranmer: 10:03

Okay. And uh this deal according to BioCentury's BCIQ database is the largest ever takeout for a private venture-backed biopharma. And it tops the Tubulis deal that we talked about literally just last week. And that was Gilead, as I teased at the top. 3.15 billion buying the antibody drug conjugate company outta Germany. Tubu let's head over to T-Cell engagers. Now, there's been quite a few deals lately. This is bumping up the credibility of TCEs in autoimmune diseases, and Lauren did one of her classic deep dive analysis decks and well, what did you learn? What, what really jumped out at you? Uh, Lauren.

Lauren Martz: 10:57

As background as you said, the reason that we were looking into this is because we saw a couple of deals for T-cell engagers for autoimmune diseases recently. And I think it just kind of, this field is at a tipping point. And the question that those deals raised for me was we have T-Cell engagers for cancer. These are a well established, or for heme cancers. This is a well established modality. they're effective. The same therapies can be applied to autoimmune diseases, but do we want the same therapies for cancer and for autoimmune diseases? And what are the different properties that may make something safer and more effective if you're applying it in a different setting? What I've found in looking through the data, the pipelines and the deals, is that it's pretty split between programs that companies are repurposing or pivoting from cancer, you know T-cell engagers that were developed specifically for cancer and now are being used in autoimmune applications and those that are uh or develops specifically to treat autoimmune diseases. The main difference when you're looking at these two different disease areas is safety and durability maybe, but mostly safety. So if you're treating a cancer where Um survival times are relatively short, there's a lot of flexibility on the adverse events that may be tolerated in a, in a therapy that gets approved. If you're treating a chronic autoimmune disease the bar for safety just goes way up. And so what's been happening in the cancer space is companies are already trying to make the T-cell engagers safer. They found that if you change the arm of the antibody that binds CD3 and binds the T-cell, activates the T-cell and lower its affinity for that CD3. The safety profile is better, the efficacy is comparable, so the whole field has been moving in this direction of making safer T-cell engagers for cancer. And the thought is that we probably can repurpose this and have this be something that's safe enough to treat an autoimmune disease, especially if there's some tweaking of the dosing and the dose schedule. The hope is that when you have a T-cell engager for autoimmunity, you may be able to dose once or just do one cycle of treatment to knock down the B cells that are causing a problem, the autoreactive B cells, and reset the immune system. That was the first finding that that's, it's really split Um between, trying to take the safer T-cell engagers that are being developed for cancer, not, maybe not the first generation ones, and apply those to Um this new setting and then developing sort of fit for purpose antibodies.

Selina Koch: 13:34

Okay. So that's the safety side. Let's talk a little bit about the efficacy side. You have this nice uh diagram in there that kind of shows that even though these are the, some cases, the same therapies or therapies against the same targets, like the tissue environment in the B cell driven cancer versus the autoreactive B cell tissue is, is just different. And that can also influence the drug properties that you're seeking. can you talk a little bit about, for instance, proliferation rates are really high in cancer, right? So maybe the absolute number of disease B cells are a lot higher in that setting. You wanna talk a little bit about that?

Lauren Martz: 14:09

Sure. So we mentioned that safety was, was really important when you're taking these into autoimmune diseases. I think like naturally. You may, you know, you could use the same therapy and there may be just a better safety profile if you're treating an autoimmune disease because the whole idea here is that you're, it's like we should have said this at the beginning. You're using a a t-cell engager to direct T cells to kill B cells, whether those are cancerous B cells in a heme cancer, or B cells that are autoreactive in an autoimmune disease patient. And so cancerous patients, as you me mentioned, they have, you know, a huge proliferation of B cells. So you're having a ton of T-cell activity and inflammation, and that leads to some of the inflammatory side effects that that happen Um in those settings. For autoimmune diseases, the B cells are, are targeting the wrong thing, but they, they're not proliferating like they're on cancer. You have a relatively normal number of B cells. So from the start that you won't have the same level of inflammatory toxicities or at least that that's what's expected.

Selina Koch: 15:13

Would it also make it easier to achieve the efficacy that you want, 'cause you don't have to eliminate as many of the B cells.

Lauren Martz: 15:18

Well, that's the hope. And the other hope is that, you know, the expectation is that there's a threshold of how how much of the B-cell population you need to eliminate to have the therapeutic effect that you wanna have in an autoimmune disease. And cancer. You can't leave any cancerous cells behind because they'll just, you know, grow again and the patient will replapse. In autoimmune disease, the hope is that if you can get rid of enough of the autoreactive B cells, you're actually able to reset the immune system and, bring it back to a naive B cell state and, and those, those cells will then not react to whatever the auto antigen was that they were reacting to. So there is this thought that maybe we don't need to be as effective. We probably don't have to be as durable. You don't need something like sitting around and being surveillance for any cells that snuck by.

Selina Koch: 16:05

so like you said in the, in the, in the slide deck there's a whole lot of promise. I think you just listed at least three really big reasons why it makes sense to reposition over here. To autoimmunity. I think you also said this bolus of activity recently is more on the promise than on the data. Like what's, what's the state of the field? Are we expecting milestones?

Lauren Martz: 16:24

The state of the field is that there's relatively little clinical data supporting the use of T-cell engagers in autoimmune diseases. We do have clinical data supporting CAR T cells against these same targets in autoimmune diseases, we've seen that CAR T cells can reset the immune system. And the whole idea is that a T cell versus an antibody like rituximab can get into the tissues and, and find those B cells that antibodies can't reach, which you sort of stay in the circulation more. The hope here is that a T-cell engager can draw the T cells to the tissues and the T cells can then penetrate the tissue better and have a CAR T like effect. But we've only seen data from like a limited number of patients. There's been some Blincyto results that have looked really promising. I think it's like six patients with rheumatoid arthritis who have, indications that you may be seeing some sort of an immune reset. And we've heard from a couple other companies that they do have positive data. We just have seen some top line results. What we will see this year is a few programs that are scheduled to read out in multiple indications. We, we have, I think three different indications from Cullinan for CLN-978. That's gonna be in lupus, rheumatoid arthritis, and Sjogren's disease. And they'll have a second Um therapy that also reads out soon. And I think we'll see data from others as well. We just haven't necessarily been told exactly when that will be this year.

Simone Fishburn: 17:55

Lauren, two things. So first of all, I really recommend subscribers see this deck. It is an amazing deck. It's really interesting. I kind of got deep into it. I just wanted to call out one thing that surprised me and one thing that didn't. Okay. And the on the surprise me front. You talked a little bit about what data we have, but on the early preclinical part of the spectrum, there's really so much innovation, not just so you know, there's a certain number of targets and combinations of targets that people are going for, but then there's also a lot of different structures. So you've got co-stimulatory receptors, you've got bispecifics, co-stimulatory receptors, you've got tri specifics, and so it feels like there's a lot of modularity in here, and I understand that there's a lot of indications you could go for, but I've tended to think about this as fairly restricted number of targets that you could go for for B-cell depletion, but it seems that people are going different ways about it. So that's Um I dunno if you've got a comment about that. That's my, on the, I was surprised. And the not so surprised was the amount of activity in China. So Um why, why wouldn't I be surprised? Because we, that's just this recurring theme, right? Especially in this space. And so a fair number of deals, I think uh are cropping up in this space with a fair number of uh innovators from China. Any thoughts about those? Lauren?

Jeff Cranmer: 19:15

Well, I wanted to quickly jump in and just say like, it, it's very fitting with the trend. We're seeing that a lot of the low hanging fruit, late stage assets in China are now gone. Companies are moving way upstream. So just looking quickly at this brilliant table that Lauren put together of about, I don't know, nine deals most of which are in China uh almost all are preclinical. That about right, Lauren, did you wanna jump in there too?

Lauren Martz: 19:41

That looks right. And yes, this is a trend that we're seeing a lot of. and Simone, back to your first point. Something I noticed about a lot of these preclinical stage programs and the ones that look more innovative that are, you know, the tri specifics, the ones that are targeting two antigens or the ones that have a co-stimulatory receptor. Those are often designed specifically for autoimmune diseases, which I thought was interesting. And those are, a lot of those are, are coming from biotechs in China as well. Yeah, it, it's all in the deck and it's, it's really interesting to get into how companies are picking the indications for these. Uh, you know, the target list is limited. There's just three main targets. But they each have their own place and there isn't a lot of proof of concept yet, but we have ideas of where they'll work and what will be enough in each indication. And it's all a really interesting strategy and, and I've, I've spoken with some companies about how they're going about it and that will be in a future story. But I'm looking forward to seeing how that, that works out in the clinic.

Jeff Cranmer: 20:39

And the buyers uh some interesting names. So no surprise. Uh, Gilead was in on the biggest deal with Ouro uh the upfront is by far and away the largest among these 1.7 billion that was in March. And then Sanofi, UCB, Boehringer, Otsuka, Cullinan, as Lauren mentioned. Prolium, and then Ken Song's Candid connected with Rallybio, to uh get a BCMA CD3 TCE. That I think is the most advanced Lauren or sort of neck and neck with the Gilead program that it's getting.

Lauren Martz: 21:19

I think so uh Candid has some clinical data, but we've only seen the, the top line results so far.

Jeff Cranmer: 21:26

All right. Well great piece, obviously from Lauren. Uh, if you're not a subscriber this one might tip the scales for you. Okay, we're gonna take a quick break and then we're gonna come back and talk about the latest executive order affecting development and regulation.

Voice Talent: 21:44

BioCentury This Week is brought to you by the 26th Bio€quity Europe in Prague, Czech Republic. Innovators everywhere are seeing speed as the driver of investment, partnering in success. Speed to the clinic. Speed to early human data. Speed to de-risk assets. The question for European biotechs is clear: How do you compete in this arena facing new momentum from Asia, and an unpredictable landscape in the U.S.? The science in Europe is there. There are more experienced operators. An investor sentiment, finally, is turning. What's needed now is speed. In its 26th edition, Bio€quity Europe travels to central and Eastern Europe for the first time — to explore emerging opportunities in the region and debate how European biotech can accelerate to compete — and lead — in today's world. Join us in Prague, May 4 to 6 for this destination event for investors and biopharma leaders. Register at BioEquityEurope.com Bio€quity Europe. Where Europe accelerates to compete.

Jeff Cranmer: 22:52

Okay. And, well, you heard it from that fine young man there, go to Bio€quity Europe in Prague. we've already sold you on the beer and the history and the literature, and now we're ready to sell you on the biotech. Shouldn't be too hard. Okay, Steve executive order out either last night or today. What's in it?

Steve Usdin: 23:13

First I have to say I like the idea uh you know, go. For the beer stay, for the biotech. What's in it? It accelerates the development of Um psychedelic therapies. It instructs the FDA commissioner to grant commissioners national priority vouchers to appropriate psychedelic drugs that have received a breakthrough designation and comply with criteria of the voucher program. This is notable, it's prescriptive language. It doesn't merely permit FDA to issue CNPVs to psychedelics. It directs them to do that. It allocates $50 million in federal funds to ARPA-H for state level psychedelic research investments. This is basically intended to provide matching funds that will enable a program in Texas for studying ibogaine if that's how you pronounce it, I'm sorry if I'm mis mispronouncing it. and separately it instructs HHS FDA and VA to increase clinical trial participation and data sharing. Here's the key thing, another key thing also is it creates a right to try pathway for psychedelics. Again, specifically also for, for. ibogaine or ibogaine. This is new. It's never worked before. There's never been a, possibility really of using Right to Try for psychedelics that was tried in the past and it was legally blocked by the Ninth Circuit in 2025, which said that the Right to Try Act didn't create an exemption from DEA's Controlled Substances Act, that's another big change in this order.

Simone Fishburn: 24:42

Steve, it's almost as if somebody in the administration has a particular interest in this area. Um,

Jeff Cranmer: 24:49

Yeah. So what's, what's the background here, Steve? Why? Why now?

Simone Fishburn: 24:52

But let's just go to precedent. I mean, obviously you know, this kind of thing has been done in cancer. I assume you know, picking out a specific area for favor and I think that, Selina might talk to this in a minute. There's no question about the unmet need in this particular area. But do either of you see any, you know, potential risks associated with this kind of a policy from the White House in this way?

Steve Usdin: 25:18

Yeah, I see. I, I see a lot of 'em, but first I want to correct one thing, this is unprecedented. There's never been an executive order before that has done anything like this. There have been executive orders that in a general way have said, you know, accelerate cancer drugs or accelerate research into treatments for opioid abuse or something like that. But there's never been one that's been this prescriptive in this specific right. And the other thing is, is that the process, the backstory behind this is extraordinary. So there's the podcaster, Joe Rogan, he said that he sent a text to the president touting um, 80% cure rates for opioid addiction from ibogaine treatments. And he said that the president texted him right back and said, oh, this is a great idea, you know, FDA is gonna do it. And then a day or two later, they have this ceremony at the White House to which Joe Rogan is invited which lends credence to his comments on this. The administration hasn't pushed back and said that what he said wasn't true. That creates an appearance of political motivation, including the possibility that the White House is attempting to offset Rogan's criticism of the Iran War. At the uh white House ceremony. Marty Makary, the FDA Commissioner, kind of gave a little bit more credence or weight to some concerns that maybe that the administration and FDA has already decided what it's going to do and it's going to put pressure explicit or implicitly on FDA reviewers. One of the things that Makary said, he said, the stories of individuals who have taken these drugs are dramatic. He said, this is a quote, the stories of those individuals with dramatic results. That is data, that is scientific data, even from a single individual. Well, that's not really the traditional definition of data, right? in fact, you

Simone Fishburn: 27:01

It's absolutely not data.

Steve Usdin: 27:03

they, they, they, the, the, the,

Simone Fishburn: 27:06

Its at best datum, its certainly data..

Selina Koch: 27:08

possibly an anecdote.

Steve Usdin: 27:10

Yes, exactly. The idea that the the plural of anecdotes is, is data, is is not one that's usually taught in medical school. Um, then he also talked about, which is interesting also, then Makary also talked. He said, well, we have randomized controlled trials. We have to do those because you know, they're a good idea. And if you look at those trials, there's a 30 to 40% remission rate for conditions like PTSD. Well, the interesting thing there is that if you look at the numbers and you look at what he said, it seems to be that he's talking about Lykos' MDMA trials, which interestingly enough in 2024, an FDA advisory committee voted 10 to one against approving, and then FDA subsequently issued a complete response letter for. all of this strikes me as, being kind of seat of the pants, and trying to push things through which is problematic, both because these are really serious conditions and they're really serious drugs, which actually may have promise. But they need to be developed in a careful way. We've talked on this podcast before and Selina has a lot of knowledge about all of the complexities of doing clinical trials with psychoactive drugs. But then there's the bigger issue also, which this kind of reinforces the narrative that I've heard from biopharma CEOs and lobbyists in Washington increasingly over the last couple of months, which is that if companies want to maximize their chances of getting their drugs to market. They have to have not only a clinical strategy, not only a regulatory strategy, but they need a political strategy. They need to be able to have some kind of political influence in the White House or in FDA or with Secretary Kennedy to make their drug approval go smoothly. The Commissioner's national Priority voucher program reinforces this idea because the commissioner or the, in this case it seems the president can pick things out and say, well, these are the things that we're going to give a big push to, and by the way, create a competitive advantage against other company.

Simone Fishburn: 29:06

And just to remind the listeners who may not have thought about it at the moment, but obviously 2024 was a different person's FDA I think that just adds to this feeling of what FDA said and ruled previously not hold now and just contributes to the continued uncertainty. That's just at a broader level, you know, was

Jeff Cranmer: 29:27

And

Simone Fishburn: 29:28

now.

Jeff Cranmer: 29:29

and more changes coming. Oh, go ahead, Selina's.

Selina Koch: 29:32

So I can't speak to the ibogaine data. I haven't followed that as closely. I'm not sure if there's large, well done randomized controlled trials there. Um, but certainly.

Steve Usdin: 29:41

the, just quickly, so FDA announced in conjunction with this White House meeting that they were clearing the first IND for ibogaine. So here you have the president and you have Um the FDA commissioner, asserting that we have a, a product that actually could have tremendous therapeutic potential. And there hasn't even been a Phase I trial conducted in the United States of it..

Selina Koch: 30:02

This is when you need really strong scientific and regulatory institutions, then you need to let them do their job. But anyway, what I can speak to like the companies who are most advanced with psychedelics, who this might advantage, right. So we have, Compass Pathways has two positive Phase III trials with a psilocybin analog in depression. And does that drug have potential? I mean, both trials were positive, so it has, it's a replicable result. But when the first Phase III read out, it lost 49% of its stock value that day. Because the magnitude of the benefit was basically right at that minimum bar for clinical meaningfulness. So the, the ma, the normal, the standard rating scale, excuse me, for depression trials, right, the Montgomery Asberg Depression Rating Scale. It's a 60 point scale. it moved, it 3.6 points versus placebo, so around 3, 3, 4 points. That's kind of generally accepted as you're just meeting the threshold for having a real effect there. So you know, the stock tanked, then they had a second Phase III read out this year. Um, and in that case they did something that's really good because it's so hard to keep these trials actually blinded because these are powerfully psychoactive and people generally know if they got the treatment or placebo, right. So the way that reputable companies like Compass are trying to navigate that difficult road is by testing a, a dose that is perceptible, barely perceptible, but far below what's thought to be therapeutic instead of placebo. So you can also have that comparison'cause it makes it, some people in the placebo group or the control group think that they're probably getting treatment right. And so that phase reread out and it was also positive. And the good news was that the result didn't get any smaller. So it was also about a three point something. I think that one was 3.8 change. Okay. So that was good. regained some of its share value, it's moving forward. It plans, its NDA this year. I mean, that just goes to show you like there probably is some benefit with this class. We definitely need new treatments in these disease areas. There's no doubt about that. But the hype around it, the language around the transformative potential and just gonna be more effective than anything that's come before. It is like, I don't know, I think we should just let the regulators do their job right. And.

Simone Fishburn: 32:25

I think, I think it's just a really important point 'cause I just wanna make it very clear. It's not that we at BioCentury have a position. Against this class of drugs, right. The skepticism is not from the potential of the drugs. I think it's really more looking at the process. And this, you know, Selina, you've talked, and you've just said some nice things about Compass. It puts so much responsibility on the companies pushing these drugs forward to do the trials the right way to, you know, you talk about the regulators doing their jobs, the companies have to be adhering responsibly, creating data that investors, that most of all physicians and patients can rely on. Rather than looking at a glide path that might have been created for them in and of itself, they should not be short circuiting.

Steve Usdin: 33:15

and, and, and that's precisely short circuiting and creating glide path is precisely what this executive order is intended to do. And it's precisely what the, the language around the White House, what Marty Makary was talking about, and creating this Right to Try Pathway, which is going to create a lot of, well, the most positive way to look at it would be it's gonna create a lot of real world data. I think the most likely thing is, is it's gonna create a lot of selective. Anecdotal data, you know, everybody who thinks that they benefited from it and maybe people really did benefit from it is gonna come forward. Um, whether we're gonna hear from the people who didn't benefit from it is less likely.

Simone Fishburn: 33:57

So Steve, quick question here for you.

Steve Usdin: 33:58

Yeah.

Simone Fishburn: 33:59

Do pay payers have a role here? Might they be the ones to require a higher standard of data, or do you think Not for these drugs. How, how do you look at that?

Steve Usdin: 34:09

Well, of course payers are gonna have a point of view. It's notable that Mehmet Oz, the Administrator of CMS was at that White House meeting. the Order directs the Veterans Administration to work closely with these companies. So I think that the implication is that at least on the, the VA side and on the CMS side, and they're gonna be big payers for these kinds of products, they're aligned with the push to, to, you know, to get them through and to get them reimbursed. So they're, they do seem to be looking at this both from the, You know, smoothing the, the path uh the regulatory path to get approval and the reimbursement side. And again, I think that, you know, the two issues that I would bring up, I think that are the most, maybe most salient beyond Um psychedelics is the level of concern around having political influence or podcaster influences on regulatory decisions. And the influence that that might have on FDA reviewers.

Simone Fishburn: 35:09

Not all podcasts, Steve, they should be listening to this one, right?

Jeff Cranmer: 35:14

So Steve, uh, staying with FDA we now have a candidate to replace Vinay Prasad as CBER Director, can you give us a quick take?

Steve Usdin: 35:24

Yeah, so there, there are multiple candidates who are in play. That's what I've heard. I've also heard from some individuals who've said that they've been approached, to take the job and that they either declined themselves or that they were informed later by the administration that they were no longer under consideration. But the leading candidate seems to be Houman Hemmati, a nd again, I, I apologize if I've mispronounced the name. He seems to be clearly to be uh Marty Makary's top choice for the job. What I'm hearing is that the actual final sign off on this is gonna rest with Chris Klomp HHS Chief counselor who's overseeing day-to-day operations at HHS. Hemmati doesn't have any experience at FDA or in government. He does have a lot of experience as a scientist and in drug development. He worked on clinical programs at Allergan. He was VP of Medical and Clinical Development for new therapies at Capricor Therapeutics. And in parallel with these roles, he's been a biotech entrepreneur and holds part-time positions at several companies that are developing ophthalmic drugs. His appointment would, if he gets a job, would mark a, continued break from decades of precedent in which center directors have always been nonpartisan, scientific leaders with deep agency experience, and honestly, very low profiles, right. Prior to the second Trump administration, FDA, center directors really consider themselves to be civil servants. They avoided making public statements about controversial or political issues. Hemmati is very politically active. He's got a profile that's unlike any other previous center director. He's frequently on Fox News, another conservative media most recently talking in support of President Trump's actions in Iran. He's leader of an organization that's seeking the recall of California Governor Gavin Newsom. So to me the relevant point really isn't what his political positions are, it's the fact that he has them and he is so politically active and vocal. And then to think that somebody who's, who's been so politically active and vocal would go into what's essentially a civil service job is unusual. Over the last few days, he's posted on X stating that politics and health should be kept separate. So it seems to be an effort to address these concerns.

Jeff Cranmer: 37:36

Steve, I'm gonna have to stop you there. We want to save some time to talk about what could be one of the largest or the largest biotech IPO ever after Kailera upsized its IPO. I'm, I'm still waiting to see if they close the greenshoe. They raised 625 million late Thursday. The stock then traded up 63% to lift its market cap above 3.3 billion. Now if the underwriters exercise their over allotment that'll bump them up to nearly 720 million, which knocks Sana out of the top spot. What do you think about these guys here, Simone? That's, that's quite, quite an achievement,

Simone Fishburn: 38:22

Yes, it's quite in achievement. The first thing I think Jeff, as I said to you the other day, is, wow, they grow up so fast, it

Jeff Cranmer: 38:29

Yeah

Simone Fishburn: 38:31

Only yesterday that Kailera was on uh NewCos being spun out of China you know, to create new companies in the West. And here they are with the biggest IPO. But let, let's just put a couple of things in context. We are talking about the field of obesity and we are talking about a company that is now looking, it's got Phase II data and it's now looking to start Phase III. That's a very different color of company than the, you know, crazy IPOs of a few years ago on preclinical data and so on. What I'm really trying to say is there's very good reason for this amount of money. They have good clinical data, they have good clinical differentiation, and they are in a therapeutic area with very, very significant market size where there's room for a lot of players kind of thing. So I do think that if you were actually gonna paint a picture of a company that would have the biggest IPO, this is probably the one that you pick.

Jeff Cranmer: 39:32

Yeah, I, I agree with you there. And then the timing worked. Um, we heard from Guggenheim's James Lee who said that they kind of got out right when sentiment greatly improved last week after the initial ceasefire, maybe that was two weeks ago. But that ceasefire's fragile uh nerves are, well, it's, it's.

Simone Fishburn: 39:55

Don't get me started on the ceasefire.

Jeff Cranmer: 39:57

Yeah, I, I, I, yeah, I got you Simone. I, it's Um in the context of the IPO market, it's making an already tricky situation trickier uh leave it at that. I do wanna give a hat tip to Jiangsu Hengrui, one of the bigger players in the NewCo model that we've been following, that is where this asset has come from. And Hengrui is, and I'm probably butchering that I'm gonna have to double down on my Chinese lessons, they still own a uh fairly sizable amount in Kailera. I think they're still around, let's see, they're at 14% going into the offering.

Simone Fishburn: 40:42

Jeff, can I just give another little shout out here because we got the big splashy Kailera one, but there was another IPO last week for Alamar, right? And that's a post money of over a billion. Thank you very much. And I don't really wanna call it little Alamar 'cause that's really only next to uh Kailera.

Jeff Cranmer: 41:02

Yeah

Simone Fishburn: 41:03

that is a developer of proteomics tools for biomarker profiling and analysis. So what does that tell you? Not only that, maybe the IPO window is opening, but look at where money is going. Biomarker profiling, proteomics, these are maybe the terms of this next era somebody thinks that they can make money with, with that technology. And you know, that had some good underwriters, J.P. Morgan, BofA Securities, Cowen, Leerink, Stifel. So, you know, I, I really think that, we are looking at the IPO Q, Seaport's in there, Hemab Therapeutics in there, we'll probably talk a little bit more about that on future pods I expect.

Jeff Cranmer: 41:43

don't, don't Sleep on Odyssey, led by Gary Glick. that company file it under, they grow up so fast a as well, Simone. And uh I think we, we would be remiss if we didn't give a shout out to Revolution Medicines, pricing the second largest follow on ever for a NASDAQ traded biotech.

Simone Fishburn: 42:04

Well deserved on some incredible data.

Jeff Cranmer: 42:07

Yeah. pancreatic cancer.

Simone Fishburn: 42:09

right, for KRAS.

Jeff Cranmer: 42:11

yeah. So 1.75 billion. Uh, I wanted to take a quick minute before we go to pay tribute to one of biotech's all time greats Denis Lucquin. He was an architect of Sofinnova Partners, a founding father of French biotech, and one of the most important figures in the growth of Europe's biotech ecosystem. He passed away early this month. He was a trusted advisor to his CEOs, a mentor to his colleagues, and a champion of his companies in and out of the boardroom. His presence was critical to the development of a generation of biotechs throughout Europe. BioCentury's remembrance of Denis can be found in the show notes or on BioCentury.com, and that is open access. well, thanks for uh hanging with us. Uh, we went a little longer today. We had a lot to discuss. Which if you're in biotech, you know, that's a good thing, lots of news, lots of deals, financings, data. You can go to our website to check out our AACR data, including a great story on dual load ADCs by Lauren. Uh, and we'll have more coverage this week. A thank you to Kendall Square Orchestra as ever for providing the music for BioCentury this week. And we'll have a special podcast later this week with Kyle Bryan CMO from our sponsor, IQVIA Biotech, and we'll be talking a bit of AACR on that.

Voice Talent: 43:48

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